Qatar | Country Report

Author: Gordon Platt

In parallel, Al-Kuwari notes, Islamic finance continues to evolve regionally and globally. Qatar is overbanked, and its biggest financial institutions are looking abroad for growth. In the first nine months of this year, QInvest advised on $3.25 billion of sukuk transactions, representing 20% of the dollar sukuk market. This includes issues from Goldman Sachs, Kuveyt Türk, Dar Al Arkan, Türkiye Finans, Al Baraka Türk and the government of Hong Kong.

GFmag.com Data Summary: Qatar

Central Bank: Qatar Central Bank

International Reserves

$42.1 billion

Gross Domestic Product (GDP)

$202.5 billion

Real GDP Growth

2011
13.1%

2012
6.1%

2013
6.5%

GDP Per Capita—Current Prices

$98,986

GDP—Composition By Sector*

agriculture:
0.1%

industry:
72.2%

services:
27.7%

Inflation

2011
1.87%

2012
1.93%

2013
3.06%

Public Debt
(general government
gross debt as a % of GDP)

2011
32.7%

2012
35.8%

2013*
34.3%

Government
Bond Ratings
(foreign currency)

Standard & Poor’s
AA/Stable/A-1+

Moody’s
Aa2

Moody’s Outlook
STA

FDI Inflows

2008
$-87 million

2009
$327 million

2010
$-840 million

* Estimates                                                     
Source: GFMag.com Country Economic Report, IMF

QInvest is currently assisting Luxembourg with its debut euro-denominated sukuk. “Now that more Islamic benchmarks have been established by sovereigns, we expect the next wave of activity to be in the corporate space,” Al-Kuwari says. “GCC [Gulf Cooperation Council] economies are showing promising signs, and we think 2015 will be another strong year for the region’s financial services sector.”

Qatar National Bank, the country’s largest lender, has an international network than comprises 26 countries. QNB aims to become the largest bank in the Middle East and Africa by 2017. It is now second in the region to South Africa’s Standard Bank in terms of assets. Last year QNB bought Société Générale’s Egyptian business for $2 billion. This September it acquired a 23.5% strategic stake in Ecobank, the leading pan-African bank, for $513 million, enabling the Qatari firm to become the largest shareholder in Togo-based Ecobank.

Meanwhile, National Bank of Kuwait agreed in October to sell its 30% stake in International Bank of Qatar to Qatari investors for $538 million. Nasser Al-Sayer, NBK’s chairman, said at the time: “We have decided to exit this partnership, as we saw limited opportunity to increase our 30% ownership in IBQ to a controlling stake. NBK’s investment in IBQ has been very successful, lasting more than 10 years, and now we are exiting at an attractive price and after achieving excellent returns over the years. We have been operating in the Qatari market for years and benefited from a decade of strong economic growth.”

The Qatari market will continue to be an important market for NBK, “as we remain focused on GCC expansions, but the emphasis is on having controlling stakes,” Al-Sayer added. He said the sale “will also strengthen our capital position to pursue our regional expansion strategy and benefit from any opportunity in Qatar or any of the other GCC markets.”

As economic growth levels out at around 6% or 7%, the risk of overheating is probably a bigger risk to the Qatari economy than a further steep drop in oil prices, economists say. While inflation could edge up to around 4% in the coming years, according to Capital Economics it is unlikely to be too troubling in an era of softer growth as the oil boom fades.

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